Danish homes and businesses reluctant to use government’s energy loan scheme
Fewer people and businesses than expected have taken advantage of a government scheme which enables high energy bills to be postponed and repaid in instalments.
A scheme introduced by the previous government, intended to make it easier for households to manage high energy bills, has had a low level of uptake, broadcaster TV2 reports.
Up to 45 billion kroner in loans was expected to be issued under the scheme but only 85 million has so far been approved the Danish Business Authority (Erhvervstyrelsen) told the broadcaster.
Since From November 1st, households and businesses have been given the option of “freezing” their electricity, gas or district heating bill for 12 months at the price they paid for the same amount of electricity and gas in the fourth quarter of 2021.
This means energy bills exceeding 2021 prices can be paid at a delayed time and in instalments. The additional cost of the bill, not the entire bill, is eligible for delayed payment.
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“[The amount issued so far] is essentially nothing. As good as zero in fact. Based on this, we can say that the scheme hasn’t really got started,” Danske Bank senior analyst Las Olsen told TV2.
Of the limited numbers who have used the scheme, private homes make up a larger number than businesses according to the broadcaster.
An analysis by SMV Danmark, an interest organisation for small and medium businesses, found last month that very few of its members planned to use the arrangement.
Just 0.6 percent of members said they would take up the loan offer, with 97 percent rejecting it outright.
Businesses said they did not want to incur large debts and that they considered interest rates to be high, the analysis found. The interest rate on the loans is 4.4 percent.
An annual fee for the loans will also be applicable to businesses. The size of the fee will depend on the number of loans issued, with administration costs to be shared between participating businesses.
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A scheme introduced by the previous government, intended to make it easier for households to manage high energy bills, has had a low level of uptake, broadcaster TV2 reports.
Up to 45 billion kroner in loans was expected to be issued under the scheme but only 85 million has so far been approved the Danish Business Authority (Erhvervstyrelsen) told the broadcaster.
Since From November 1st, households and businesses have been given the option of “freezing” their electricity, gas or district heating bill for 12 months at the price they paid for the same amount of electricity and gas in the fourth quarter of 2021.
This means energy bills exceeding 2021 prices can be paid at a delayed time and in instalments. The additional cost of the bill, not the entire bill, is eligible for delayed payment.
READ ALSO:
- Denmark households can postpone gas and electricity bills
- EXPLAINED: How can households in Denmark postpone paying their energy bills?
“[The amount issued so far] is essentially nothing. As good as zero in fact. Based on this, we can say that the scheme hasn’t really got started,” Danske Bank senior analyst Las Olsen told TV2.
Of the limited numbers who have used the scheme, private homes make up a larger number than businesses according to the broadcaster.
An analysis by SMV Danmark, an interest organisation for small and medium businesses, found last month that very few of its members planned to use the arrangement.
Just 0.6 percent of members said they would take up the loan offer, with 97 percent rejecting it outright.
Businesses said they did not want to incur large debts and that they considered interest rates to be high, the analysis found. The interest rate on the loans is 4.4 percent.
An annual fee for the loans will also be applicable to businesses. The size of the fee will depend on the number of loans issued, with administration costs to be shared between participating businesses.
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